Psychology of Economic Decision-Making
Ainslie's Paradox refers to the phenomenon where individuals tend to prefer smaller, immediate rewards over larger, delayed ones, leading to inconsistent decision-making and self-control issues. This paradox highlights how people often struggle to resist temptations in the present, despite knowing that waiting would yield better long-term outcomes. It is closely related to hyperbolic discounting, where the perceived value of future rewards diminishes more rapidly than that of immediate rewards.
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